Australia’s Evolving Deals Landscape: Survey

Australia’s Evolving Deals Landscape: Survey

This year is set for another solid round of M&A activity. But what are the plans of corporate Australia beyond the next 12 months? KPMG’s 2017 Evolving Deals Landscape survey provides far-reaching insights into the perspectives and plans of corporate Australia, now and over the next three years.

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Our survey captures the wide-ranging opinions of more than 300 chairs, CEOs, CFOs, board directors, business owners and other senior executives. Together, they give important insights into the thinking and planning going on behind this country’s ever-changing deal landscape – from buying, selling, fixing, funding and partnering perspectives.

Key insights and findings

The survey findings point to a continuing buoyant market over the next 3 years. Other key insights include:

  • 84 percent of Australian executives expect the current strong M&A levels to remain steady or increase.
  • However, only 34 percent of respondents confirmed they would be undertaking M&A in the next 3 years. With fewer still (21 percent) undertaking a sale or divestment.
  • 42 percent indicated they would be entering into a JV, alliance or other form of partnership over the next 3 years.
  • The top three drivers of M&A in Australia are consolidating market share (41 percent), expanding the customer base (40 percent) and seizing targets as they became available (32 percent).
  • The top three perceived barriers to M&A are finding a target where both organisations are strategically aligned (40 percent), board and management appetite for risk (39 percent) and overpriced assets (36 percent).
  • Of those engaging in M&A over the next three years, 91 percent indicated they were intending to invest close to home in Australia or New Zealand.
  • The most important factors to realise the value of a deal was conducting effective due diligence (54 percent), having a well-executed integration plan (42 percent), and a clear strategy for value creation post-deal (37 percent).
  • Only 13 percent of companies consider cultural fit critical to realising deal value, yet more than three quarters (77 percent) find cultural alignment and HR issues to be the most challenging aspects of integration.

The survey also highlights some of the key differences in deal outlook between Australia's various sectors.

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